Mike O'Brien: On 17 December 2007 the Government announced a package of significant improvements to the financial assistance scheme (FAS). This statement is to inform the House of the significant progress being made in implementing those changes.
	Consultation on Draft Regulations
	We are today beginning consultation on a first set of draft regulations. These will increase the percentage covered by the FAS to 90 per cent. of each qualifying member's accrued pension and allow us to pay people from their normal retirement age, subject to a lower limit of age 60. This is the first key stage in aligning the calculation of FAS assistance to the calculation of compensation under the Pension Protection Fund.
	The consultation will end on Maundy Thursday, 20 March. We have sought and obtained cross-party and key stakeholder agreement that a limited written consultation period is appropriate for these draft regulations. This will enable us to increase people's payments as soon as possible.
	In addition we are consulting on proposed changes to the annuity factors used when we need to calculate the approximate annual rates of pension that could be secured by cash sums taken from their schemes by members, for instance as a lump sum. This is a technical area, but the revised factors we are proposing would result in an increase in FAS payments to individuals whose FAS payments are calculated by reference to these annuity factors.
	The consultation documents are available on the Department's website at:
	www.dwp.gov.uk/publications/dwp/2008/FinancialAssistanceScheme(MiscellaneousAmendments)Regulations2008.pdf; and
	www.dwp.gov.uk/publications/dwp/2008/revision-of-annuity-factors-in-FAS.pdf; or alternatively via the FAS website at: http://www.dwp.gov.uk/fas.
	We will be issuing a second set of draft regulations later this month for a longer period of consultation. These will include provisions for early payment for those in ill health, the extension of the FAS to members of schemes wound up underfunded with a solvent employer, requirements on trustees to provide relevant data, and removal of the option to apply for reinstatement into the state additional pension for those eligible for FAS.
	Reinstatement to the State Pension System
	At present members of a qualifying FAS scheme may choose to use their remaining funds in their scheme to pay for reinstatement into the state additional pension (known as "Deemed Buy-Back"). Where this occurs the FAS calculates a notional pension to use as a base for the FAS payments.
	The Young review made clear that the take up of "Deemed Buy-Back" has been low and its interaction with the FAS is potentially anomalous, and that removal of the ability to buy back into the state scheme could simplify the wind-up process.
	We propose to remove the ability for FAS qualifying members to buy back into the state scheme by "Deemed Buy-Back". We will be seeking to make this change as part of the second set of FAS regulations that will come into force in July, subject to passage through Parliament.
	Some trustees will already have received information on the costs of buying back (known as "Technical Amounts") from HM Revenue and Customs (HMRC). HMRC will continue to process any applications subsequently received in respect of members for whom that information has been supplied. However, from today, HMRC will suspend action on requests for "Technical Amounts" pending parliamentary consideration of the proposed regulations.
	Trustee Guidance Note
	Today we are also issuing the first in a series of updates to the trustees of schemes that qualify for FAS which will set out our expectations of them as we move to full implementation of the announced package of improvements to the FAS.
	Compromise Agreement Schemes
	Regulations made last December extended the FAS to schemes which wound up underfunded as a result of a compromise agreement made by the trustees to prevent the sponsoring employer's insolvency. Six schemes in this position have now qualified for the FAS and the FAS operational unit will be working with the trustees of those schemes to obtain the necessary data to ensure that payments can be made to their members as soon as possible. The schemes concerned are:
	Dragon Cosmetics Pension Plan
	Expamat International PLC Group Retirement & Life Assurance Scheme
	Fredk H Burgess Ltd Pension & Life Assurance Scheme
	J & D Wilkie Ltd Pension Scheme 1982
	Lucas Yuasa Pension Scheme
	Norman Butcher and Jones Holdings Ltd Retirement and Death Benefits Plan
	The progress outlined above demonstrates the Government's commitment to the speedy implementation of the announced changes to the FAS.